Private schools at risk of closure over VAT hike already face big budget shortfalls, says Phillipson

Labour has pledged to end the VAT exemption for private schools in order to raise an estimated £1.6bn

Private schools at risk of closure as the government imposes 20 per cent VAT are already facing “big budget shortfalls”, education secretary Bridget Phillipson said.

Labour has pledged to end the VAT exemption for private schools to raise an estimated £1.6bn, which the party said would be used to hire 6,500 teachers in the state sector. Ms Phillipson said the plan is aimed at “driving high standards in our state schools”.

While concerns have been raised over the future of some independent schools as a result of the planned tax hike, the education secretary said issues facing schools that are struggling to survive come partly as a result of their own business choices.

Education Secretary Bridget Phillipson (Jordan Pettitt/PA) (PA Wire)

She told Sky News: “Private schools are businesses that can make choices about how they manage their budgets, the level of fees that they charge, and ultimately, it’s about how attractive they are to families in terms of the numbers of students that are sent there.

“We have seen private schools in recent years whack up their fees year on year, way beyond inflation, and that has priced out lots of people.

“And I think what we’ve seen with some of the examples that are being discussed are schools that were already experiencing big budget shortfalls, weren’t attracting the same numbers of students that they might like to attract, and that’s what’s driving what we see here now.

“Our plans to impose VAT on private school fees are about driving high standards in our state schools.”

While Ms Phillipson said private schools should be an option for parents, she said her focus is on improving state schools, which 93 per cent of children in the UK attend.

Asked whether it matters if private schools close as a result of the government’s plans to charge VAT, she told Sky News: “I want private schools to be an option for those parents who choose to send their children there.

“Of course, they will be able to continue to do so. I know that parents want to do what’s right by their children, and that’s absolutely as it should be, but I would just gently point out that 93 per cent of children in our country go to state schools.

The cohort of students who are receiving their A-level results were in Year 9 when schools closed due to the pandemic (PA) (PA Wire)

“That’s where I’m determined to focus my efforts as secretary of state, to tackle some of those big gaps that we see opening up, where it comes to outcomes for our young people, making sure that the background that you’re from, the town that you’re born doesn’t determine what you can go on to achieve.

“And that does involve making political choices about how we raise money, how we spend money, and that’s what imposing VAT on private schools is all about – driving up standards in our state sector, where the majority of your viewers will send their children to school.”

Her comments came as hundreds of thousands of students received their A-level results across the country, with more than a quarter (27.8 per cent) of UK entries awarded an A or A* grade. This is an increase of 0.6 percentage points on last year, when 27.2 per cent achieved the top grades.

But the latest statistics also show that the attainment gap between independent schools and comprehensives in England has increased compared with last year. The attainment gap measures the educational outcomes of children from different backgrounds and schools.

Ms Phillipson promised to “break down these barriers to opportunity” and “improve children’s life chances regardless of their background”.

Some 49.4 per cent of independent school candidates scored grade A or above in all subjects, compared with 22.3 per cent of those at comprehensive schools – a gap of 27.1 percentage points, the latest Ofqual figures show.

Last year, the gap was 25.4 percentage points, while in 2019 it was 24.8 percentage points.